If you’ve just discovered the 1 million posts under #joshuatree on Instagram and feel like you’ve missed out on the Joshua Tree real estate craze 2018, you’re in luck! It’s not too late to cash in and buy an investment property in the Joshua Tree real estate market.
Unlike a lot of popular things on Instagram, visiting Joshua Tree is not a fad that will fade and leave you with a negative cash flow property. This is a concrete real estate investment strategy that will bring life (and money) into any property investment portfolio!
Joshua Tree Real Estate: Then and Now
Five years ago, you might not have even heard of the small village-like location of Joshua Tree, CA, let alone ever thought of investing in real estate there. With a small population, the region only drew outdoor enthusiasts and people looking to escape the bustling city life of Los Angeles or Palm Springs.
Most local businesses had two or three employees in this real estate market. There were no lines to get into anywhere in Joshua Tree. Sure, the Joshua Tree National Park has always drawn visitors, but it’s nothing compared to the stats we are seeing today.
Thanks to the increasing popularity of national parks across the US as well as the movement toward the Bohemian lifestyle among millennials, tourism has nearly doubled in the past five years. The 2018 real estate market is expecting over 3.1 million visitors. Businesses have reported an increase in activity of 500% and you can only imagine how Airbnb hosts are doing in the Joshua Tree real estate market.
Traditional hotels in the location don’t draw major attention as millennials visiting Joshua Tree are looking for a different experience. In 2017 in the small region, tourists spent 32.9% of a total of about $140 million on lodging/camping. So, you can see the definite profit you stand to gain as an Airbnb Joshua Tree host.
Airbnb Joshua Tree- Is Airbnb Legal?
This is where this great real estate investing opportunity gets muddled. Is Airbnb legal in this market? While there are no clearly enforced laws and regulations against Airbnb Joshua Tree, the practice of running a short term rental property is met with animosity from the locals. Don’t be surprised if you buy a Joshua Tree investment property this year and it’s met with harsh regulations in the near future.
However, because of the great financial benefit to the local economy and surrounding communities that Airbnb guests bring with them, it’s unlikely Airbnb hosts will be run out of the region.
Just be sure to always practice smart rental property management here and stay up to date with new Airbnb regulations and laws. Respect the locals and make sure that your Airbnb guests are not left to run wild, which is the major complaint of Joshua Tree residents.
Joshua Tree made this list for The 5 Best Places for Vacation Rentals in the US Real Estate Market 2018. Check it out!
Joshua Tree Real Estate Market 2018- What to Expect from Owning an Airbnb Rental
The following real estate analytics are provided by Mashvisor’s investment property calculator. What they reveal is very interesting for Joshua Tree real estate investors. Let’s take a look:
Median Property Price: $281,319
Airbnb Rental Income: $2,588
Airbnb Cash on Cash Return: 6.71%
Airbnb Cap Rate: 6.71%
Airbnb Occupancy Rate: 55.57%
Take a look at what our powerful real estate investment calculator can do here.
The Median Property Price of Joshua Tree Real Estate
The first thing that should catch a real estate investor’s eye in 2018: the relatively affordable median property price of Joshua Tree real estate. The California real estate market is well-known for its super expensive investment properties. Even though they typically offer a great return on investment, rental properties in the state are sometimes too expensive for a real estate investor to even break into the market.
Just take a look at the popular Palm Springs real estate market, a highly recommended place to invest in real estate this year. The median property price is $660,946! The return on investment isn’t even as high (cash on cash return of 4.56%) as it would be with a Joshua Tree investment property.
Buyer’s Market or Seller’s Market?
Of important note, however, is the fact that with growing demand from homebuyers and real estate investors alike, the Joshua Tree real estate market 2018 is a strong seller’s market. That label is tangible in the 25.9% real estate appreciation last year reported by Zillow. As inventory is naturally an issue in this small region (as it is almost everywhere in the US housing market 2018), investment property prices will only continue to increase. Zillow forecasts a one year increase of 12.4%, almost 4 times the national average for real estate appreciation this year.
Essentially, you need to grab a piece of Joshua Tree real estate now before it becomes another overpriced seller’s market that’s difficult to enter.
The Airbnb Rental Income + Airbnb Occupancy Rate
The killer combination of that high Airbnb rental income and occupancy rate will ensure a positive cash flow property in Joshua Tree, CA. Don’t forget that while the median Airbnb rental income is already high for this real estate market, owning an Airbnb means changing rental rates with the seasons. That means higher rental income during hot seasons like during Coachella or other popular music and arts festivals.
The Airbnb occupancy rate is good considering the rental income. One thing to highlight is more and more tourists are coming during off-peak seasons to avoid the hubbub of increasing visitors i.e. the long wait and crowds. This means that in the coming years, the idea of an “off-peak season” may disappear in the Joshua Tree real estate market and an Airbnb host will likely see increasing Airbnb occupancy rate!
The Return on Investment of Joshua Tree Real Estate
The cash on cash return (and cap rate) speaks volumes of the successful real estate investing you’d enjoy if you invest in Joshua Tree real estate. In fact, based on the cash on cash return, Joshua Tree is one of the best places to invest in real estate with short term rentals of 2018.
Where to Find the Best Joshua Tree Investment Properties
The best investment strategy to implement now would be to find those Joshua Tree investment properties that have a cash on cash return above the average. A real estate agent can definitely help you out with this, but there is another way. Time is of the essence with the rising real estate prices and you need to find an investment property now. Not just any investment property, but one with a high return on investment. How can you possibly do this alone? You’re not alone, Mashvisor’s here.
Use Mashvisor’s property finder tool. We just did and here are a few real properties in the Joshua Tree real estate market that we’d thought you’d be interested in. See the property addresses and investment property analysis of each here.
Airbnb Joshua Tree Rental Property #1:
Listing Price: $95,000
Airbnb Cash on Cash Return: 13.98%
Airbnb Joshua Tree Rental Property #2:
Listing Price: $98,000
Airbnb Cash on Cash Return: 13.06%
Airbnb Joshua Tree Rental Property #3:
Listing Price: $139,900
Airbnb Cash on Cash Return: 12.44%
Leaving You with a Final Tip: Play it safe and invest in Joshua Tree real estate with an Airbnb rental strategy in 2018. It’s not too late to cash in on the craze! Be a great landlord and respectful to locals and local laws and you can really be making money in real estate this year.
Will you invest in Joshua Tree real estate this year? Let us know in the comments below.
Learn which investment strategy is better: Buying Property vs. Buying Land in Joshua Tree: Which One Is the Best Investment Strategy?